You Can Now Buy Gold Bars at Costco — But Is It a Good Idea?

Never to be outdone by other retailers, Costco began selling gold bars in September 2023. But there are a few caveats: For starters, you typically can't snag these bad boys while grocery shopping in-store as the gold bars are mainly available on Costco’s website only (though some local warehouses may also carry them for a "lower, non-delivered price," according to the retailer). 

Costco's gold is sold as 1-ounce bars, and buyers are limited to two bars per purchase. You must be a Costco member to purchase and the items are typically shipped via UPS. Also, the bars are not eligible for refund or price adjustments so those who suffer from buyer's remorse should be extra wary before deciding to buy. 

At the time of writing, the spot price of gold was $2,041 for an ounce, and Costco is listing its gold for $2,099.99 a pop. But is it worth buying gold from Costco? We've outlined all the details, plus the pros and cons to help you make an informed decision.

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The gold bars quickly gained popularity and began selling out within hours of being listed on the retail giant's website. By December 2023, Costco had sold more than $100 million in gold, according to CNBC. Costco's Chief Financial Officer, Richard Galanti, also noted that while gold doesn't typically carry a huge profit margin, the sheer volume of sales coupled with growing demand have raked in significant profits for the company. 

Costco's decision to sell gold bars has garnered attention from various financial analysts, retail industry experts, and private investors. Experts are now weighing the implications of a mainstream retailer such as Costco offering a traditionally niche investment product. 

By making gold bars readily available to a wider audience, Costco may be bringing down the overall value of gold and making it more difficult to buy and re-sell it at fair-market value, an article by Bankrate found.

But on the flip side, according to financial firm JPMorgan, gold prices are expected to see a boom in the coming months — potentially reaching a record high of $2,175 per ounce by the fourth quarter of 2024. 

Related: 10 Things You Should Never Buy If You're Broke

In terms of the pros, there are several factors to consider. On the positive side, gold is often viewed as a hedge against inflation and a safe-haven asset during times of economic uncertainty or geopolitical unrest such as the ongoing conflict between Russia and Ukraine. Its inherent scarcity and historical value as a source of wealth also add to its allure and potential as a solid investment. 

According to Jonathan Rose, CEO of Genesis Gold Group, the benefits of investing in gold still outweigh the risks. 

“People are looking for a safe haven ... to protect their wealth. And gold kind of ticks all those boxes," says Rose. "People may see value in having something tangible — and put precious metals in a safety deposit box or into a retirement plan, even like an IRA or 401k ... to safeguard what they have whilst they see what’s happening in the market.”

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However, there are also downsides to investing in gold. For starters, it does not generate income and interest like stocks, high-yield savings accounts, or bonds, and its price can be volatile and subject to market fluctuations. There are also safety considerations such as storage and insurance when it comes to buying physical gold. We certainly wouldn't recommend storing gold bars under the mattress. 

David Wagner III, head of markets and equities at Aptus Capital Advisors, offers a more critical viewpoint on the investment of gold. 

"Gold is one of the worst things that you can ever own," says Wagner as he highlights the inefficiency of using gold as a shield against inflation. He notes that there have been periods where inflation significantly outpaced the growth in gold prices, and argued that there are far more effective methods for protecting against capital loss.

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Buying gold from Costco is ultimately up to individual considerations. Customers generally report satisfaction with their gold purchases — especially since Costco is a reputable company known for its stringent standards and quality products. 

That said, experts like Wagner caution against gold as an investment — highlighting its inefficiencies as an inflation hedge and how other investment strategies are more effective. But, on the other hand, experts like Jonathan Rose view gold as a useful portfolio investment that is well worth the risk. 

Ultimately, while buying gold from Costco is appealing for its accessibility and perceived stability, it's important to consider expert advice and take into consideration how it fits into your overall investment strategies. 

Related: Why I-Bonds May Be the Right Place for Your Money Now